National Grid decommissions several products as part of overhaul

National Grid has announced the retirement of a series of products as part of its ongoing overhaul of balancing services.

The closures form the first stage in a three-step process of rationalisation, standardisation and improvement, which the system operator announced in June.

In a letter to industry, National Grid's head of business development, Claire Spedding, says the firm is changing the way it buys balancing services to “break down barriers to entry and encourage wider participation”.

“The first stage of this programme is to review the current products to identify which can be removed from active procurement to simplify the product suite,” she adds. “This will be followed by a more fundamental development programme for the remaining products”.

The system operator has ceased the procurement of eight balancing services which it believes are no longer required. Existing contracts will not be terminated immediately, although “discussions are being held with affected parties to identify other routes to market for their assets, where appropriate”.

Alongside the closures, National Grid has also revealed plans to make multiple short-term improvements to the way it procures Firm Frequency Response.

“Since January 2017 we have seen a 23-fold increase in the number of tenders received, with 206 tenders received in August alone,” writes Spedding. “This makes interpreting the market very difficult, both for the system operator and industry, due to the volume and variability of tenders.”

She says the information which National Grid provides to bidders both before and after procurement “does not provide them with sufficient clarity to participate effectively in the market. Parties have told us that it is not clear how the assessment process works, what services we value and when, and how we benchmark against the mandatory frequency response market.”

“We have therefore set out a number of ‘quick wins’ in the FFR market, along with our aspirational timeline for delivery, with the intention of reducing some of the complexity currently experienced”, she adds.